The strong employment growth of last year should continue for some time in light of the continued growth of job vacancies. But while overall the opportunities are better now for those looking for work than have been for some time, the picture remains extremely varied, depending on where you live and what type of work you are looking to do.
Last year certainly was a good year from employment. Over the year, total employment grew by 3.4% – the best annual growth since September 2005, and the number of hours worked grew by 3%, the best since 2010. And while the growth levels do seem to have come off their peak a bit in the start of this year, employment is still growing very solidly:
And generally the signs are good for this employment growth continuing, with the latest job vacancy figures showing a 4.4% increase in private sector vacancies in February compared with the three months to November last year:
Again this is showing a slight fall from the peak quarterly growth of 5.3% that we had in the middle of last year, but it remains extremely solid – and marks now 18 consecutive quarters of growth, which breaks the previous record by a year.
Of course the number and growth of job vacancies does not tell us everything – especially if the size of the labour force is growing faster. This is why economists use the “job vacancy rate,” which measures the number of vacancies as a percentage of the labour force. On this score again things are very good – in fact better than ever. In February, the vacancy rate was a record 1.7% – higher than even at the peak of the mining boom:
And this good figure is also reflected in the number of unemployed per vacancy.
In February there was, on average across the nation, just 3.3 unemployed per vacancy – the lowest rate since May 2011. And while underemployment remains at near record levels, even if we include those workers (always a bit perilous given being underemployed does not mean you are looking for a job, you may merely wish to get more hours in the job you are currently doing) the level of underutilised workers per job vacancy is 8.3 – the lowest for six years:
Now yes, a national average is all well and good, but if you live in Adelaide, you’re not very likely going to be answering a job advert in Brisbane.
Across each state, New South Wales, Victoria, the ACT and Northern Territory are all performing better than the national average. But while in NSW there are just 2.8 unemployed per vacancy, in South Australia there are 5.9 – the highest in the nation:
But even South Australia is doing better now than it was five years ago – as are most states. Queensland hasn’t seen much improvement, and in Western Australia the end of the mining boom continues to bite. When the mining boom was in full swing there were just 1.2 unemployed per vacancy in the WA, now there are 4.3:
But a case could be made that given the current level of job vacancies, that the unemployment rate should be lower.
Economists compare the vacancy rate with the unemployment to gauge how well the labour market is clearing unemployed. Generally the higher the vacancy rate – ie the more vacancies per people in the labour force, the lower the unemployment rate should be because it is easier to find work.
This relationship (known as the Beveridge curve) has held up well over the past 40 years, but at the moment it seems things are a bit “sticky” to use the economic term:
Given the current vacancy rate, you would expect the unemployment rate to be much lower – nearer 4%.
And it is here that we see the continued issues of our changing economy.
While the Bureau of Statistics does provide a breakdown of vacancies by industry, the department of jobs’ monthly vacancy report breaks down the vacancies by occupation.
Since the end of 2016, when the nice boom in employment began, the biggest growth in job vacancies have been for professionals. This in itself is not surprising – professionals make up the biggest chunk of all employed – some 24% of all workers. But the growth in job vacancies has greatly outpaced the number of people working in those occupations. Vacancies for professionals accounted for 35% of the growth in all vacancies since December 2016:
By contrast, labourers, sales persons, and community and personal service workers have all been occupations where the growth in vacancies is below what would be expected given the level of people employed in such work.
The situation for labourers is quite stark. In 2007, labourer jobs accounted for 11% of all vacancies and for 11% of all employed. Now they account for 10% of all employed but just 6.4% of all vacancies:
The economy is very much moving towards both a services sector, but also a more educated/skills-orientated workforce. That means that for some, in some parts of the nation, opportunities are as good now as ever before. But for others, the risks of being left behind are greater than in the past. That means the need for improving the skills and education of those looking for work – and for those about to enter the labour force – remains paramount.
- Greg Jericho is a Guardian Australia columnist
